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An agreement by government-run funds of Abu Dhabi and Singapore to increase transparency won't shed more light on Temasek Holdings Pte's $118 billion portfolio, because the company said it already meets disclosure guidelines.

U.S. Treasury Secretary Henry Paulson said yesterday that funds including the Government of Singapore Investment Corp. agreed to adopt rules for greater disclosure. Temasek, owned by Singapore's finance ministry, said it already provides more information than government-run funds.

“Temasek is not a sovereign wealth fund,'' spokesman Mark Lee said by telephone today. “Temasek has to sell assets to raise cash for new investments and doesn't require the government to give approvals.''

The U.S. is pushing sovereign wealth funds to adopt new disclosure rules because of concern that a lack of transparency could spark a rise in protectionism. The European Commission has called for an international accord to limit the political influence of the state-owned capital pools, which have grown in number to about 40, managing between $2 trillion and $3 trillion.

Singapore's GIC and counterparts in China, Russia and Dubai have deployed record central bank reserves of as much as $2.9 trillion, buying stakes in U.S. financial services companies. GIC invested in UBS AG and Citigroup Inc. in the past three months as banks sought to replenish capital after the value of their U.S. subprime mortgage-related assets plummeted.

`Important Role'

In January, Temasek paid $6.2 billion for a 9.4 percent stake in Merrill Lynch & Co. after the largest U.S. brokerage had the biggest loss in its 93-year history because of writedowns on subprime mortgages and related securities.

“These types of groups play a more important role because of their investments in large financial institutions,'' said David Cohen, a Singapore-based economist with Action Economics. “They will be under pressure to move towards greater disclosure to show that their investments are business transactions and not politically motivated.''

Temasek, set up in 1974 to manage S$350 million ($252 million) of Singapore's state assets, now owns stakes in ICICI Bank Ltd. of India, Bank of China Ltd. and DBS Group Holdings Ltd., Southeast Asia's biggest bank free credit reports.

The company, which has about S$164 billion ($118 billion) portfolio of assets, started publishing an annual review of its investment strategy and performance in 2004, while GIC first publicly disclosed details on its performance in 2006.

No Impact

“Temasek discloses a lot more than GIC and always has a strong sense of corporate governance,'' Lee said. Paulson's statement “will not any impact,'' he said.

The company seeks approval from a board consisting of independent directors and a representative from the Ministry of Finance, its only shareholder, Lee said.

Temasek in 2006 headed an investor group that bought almost all of the stock in a Thai telecommunications company from the family of then-Prime Minister Thaksin Shinawatra, triggering a chain of events that led to the Thai premier's ouster in a coup.

The company also faces opposition in neighboring Indonesia, where the antitrust regulator has accused it of using stakes in the nation's two biggest mobile-phone companies to fix prices.

“Temasek is ultimately controlled by the government and it is not a private organization,'' said Cohen of Action Economics. “Temasek has many similarities to GIC.''

The company's net income fell 29 percent to S$9.1 billion in the year ended March 31, 2007, Temasek said in its annual report released Aug. 2. Total assets under management rose 27 percent to S$164 billion after Temasek bought shares in companies including Standard Chartered Plc, and is the U.K. bank's biggest investor.

Temasek has given a return on investment of more than 18 percent by market value since its inception more than three decades ago, according to the company's most recent annual report.

Paulson said yesterday the three countries agreed that all investments must be based only on commercial grounds, and the funds should increase the disclosure of information and make sure they have strong risk management and governance controls. They also agreed that countries that receive investment shouldn't set up protectionist barriers and have consistent, non-discriminatory investment rules.

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